‘The Amazon of health insurance’

eHealth CEO on what it will take to insure millions under Obamacare

By

JenWieczner

As CEO of eHealth
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, an online insurance broker that recently received government authorization to enroll people in subsidized health plans in the 36 states with federally operated exchanges next year, Gary Lauer will in effect be in charge of helping many Americans buy health insurance for the first time starting Oct. 1.

The announcement sent eHealth’s stock price soaring more than 30%, but for Lauer, the unveiling of the Affordable Care Act’s new insurance exchange marketplaces also marks a more personal victory: Under the law, which prohibits insurers from rejecting people for pre-existing conditions, he can finally purchase individual health insurance on his own if he needs it, after a bout with cancer a few years ago made him ineligible. “I’m CEO of the largest health insurance source in the country, and even I couldn’t get a health insurance product on it to insure myself,” says Lauer, adding that he is currently insured through the company’s employee health plan.

ehealthinsurance.com

Gary Lauer, eHealth CEO

With 25 million to 30 million more people expected to purchase coverage under the new ACA rules, Lauer is preparing for the individual health insurance market—eHealth’s market—to double or triple in size. Since eHealth sold the first health plan online in 1998, it has enrolled more than 3 million people, 40% of whom were previously uninsured. At least four other online insurance brokers also signed agreements with the government to sell subsidized health plans, but eHealth is by far the largest — in terms of sales volume, product selection and market cap.

Lauer, who says he is now in great health, spoke with MarketWatch about his role in the ACA’s health insurance exchanges, how long it will take to sign up and what the law means for his own health coverage.

MarketWatch: Your recent agreement with the Centers for Medicare and Medicaid Services allows people to buy medical coverage on eHealthInsurance.com instead of just on the federal health insurance exchange in 36 states. What does this mean for consumers?

Gary Lauer: It lets us provide an insurance marketplace not only for the typical consumer but also for people who are eligible for subsidies [roughly, singles making less than $46,000 a year, and families with income below $94,000]. The Affordable Care Act has always been very clear that people who are not eligible for subsidies would have the choice of getting health insurance directly through the government exchange, through an insurance carrier or through a private exchange. Now, lower-income people have the option of coming to us to enroll, too, because we’ll be able to connect directly to the federal exchange to determine whether someone is eligible for subsidies. We think this agreement is also important for the success of the ACA, because the more viable entry points you have into the insurance pool, the more people you’re going to get enrolled.

Why would someone use eHealth instead of the government website to buy health insurance?

There may be several reasons. One is that we provide a lot of decision support tools to help people through the process. For example, we learned years ago that people don’t really care about the brand that’s on their health insurance as much as they care about their relationship with their physician. If you tell us the name of your physician, we’ll show you all the products that support that physician. And after someone is enrolled, we provide tools for using the plan, like figuring out where kids can get their teeth cleaned. Unlike the government, we’re a technology company, and we’ve been in this business for years.

Can people enroll online, or will they still need to talk to a person, or mail a form?

There’s not a shred of paper in the process. We do it all online. And 20% of our volume comes through hand-held devices like phones or tablets. Think of us as the Amazon.com
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of health insurance. That’s the analogy I like to use, because that’s how the business operates. We were doing this online as an exchange long before the words “exchange” and “health insurance” were in the same sentence.

Over 80% of people who enroll on eHealth have no human interaction: No phone, no online chat—they go through the whole process online. For the other 20% of people, we have customer service over the phone or via online chat to help people through and get them right back online.

So, walk us through it. What happens when someone comes to eHealth to buy health insurance?

When someone comes to us, we ask if they might be eligible for a government subsidy. If they say yes, we take them through the process by which the subsidy is determined. If the government tells them they’re eligible, we’ll show them all the products that the subsidy can apply to.

How long will the process take?

The longest part of the process is taking people into the federal government website to determine if they are subsidy-eligible, because they will have to complete all of the required information. But if the government technology works as planned, the verification should be a matter of seconds. I don’t think you’ll be staring at a screen for more than 10 minutes. It’s not going to take any longer on eHealth than it is on a government exchange. We want this to be one-stop shopping.

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